CHHABILDAS versus THE STATE OF MAHARASHTRA & ORS. on 6 February 2018

[2018] 1 S.C.R. 411

CHHABILDAS

v.

THE STATE OF MAHARASHTRA & ORS.

(Civil Appeal No. 1607 of 2018)

FEBRUARY 06, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Maharashtra Regional Town Planning Act, 1966 – ss.49, 126,127 – Obligation to acquire land on refusal of permission or ongrant of permission in certain cases – On facts, appellant’s landreserved for public purpose under a development plan – Issuanceof purchase notice u/s.49(1)(e) – State Government confirmed thepurchase notice and stated that proceedings for acquisition of landwould be initiated within one year – Submission of proposal foracquisition, however, no action taken – Letter by the owner to theCommissioner that since no action took place, the said proposalhas lapsed and thus, the land to be returned to the owner – However,the Commissioner’s stand that acquisition proposal is in processand there was no lapse – Writ petition by appellant – Dismissed bythe High Court – Held: Section 49(1) itself states that the purchasenotice must require the appropriate authority to purchase the interestin the land “in accordance with the provisions of this Act” – Oncethe appropriate authority makes the necessary application to acquirethe land within time u/s.49(7), the Court moves over to ss.126 and127 – Scheme of ss.126 and 127 makes it clear that if 10 yearshave passed from the date of publication of the development plan,and purchase notice has been served u/s. 127, and no steps havebeen taken within one year from the date of service of such notice,all proceedings shall be deemed to have lapsed – Thus, even incases covered by s. 49, the drill of s.126(4) and s.127 will have tobe followed, subsequent to the appropriate authority making anapplication to acquire the land within the period specified in s. 49(7)– In the instant case, 15 years have passed since the date ofpublication of the development plan, and over 10 years have passedsince the date of the purchase notice issued u/s.49 – Letter showsthat an application was made within the requisite time period toacquire the said land – However, since after the said letter nothing

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Ahas been done to acquire the appellant’s property, the reservationcontained in the development plan as well as acquisition proposalhave lapsed, in order to do complete justice between the parties u/Art. 142 – Constitution of India – Art. 142.

Disposing of the appeal, the CourtB

HELD: 1.1 The object of Section 49 of the MaharashtraRegional Town Planning Act, 1966 is clear that once a purchasenotice is received by the authorities, there arises, as the marginalnote to the Section also indicates, an obligation to acquire land.The timelines contemplated by the section also indicate that theCowner or person affected cannot be left to hang indefinitely withouta decision to follow up the purchase notice by acquisition of theland in question. However, the submission that Section 49abruptly ends with sub-section (7), after which there are notimelines indicated as to what is to happen after the appropriateauthority makes an application to acquire the land within one yearDfrom the date of confirmation of the notice, cannot be accepted.Inasmuch as Section 49(1) itself states that the purchase noticemust require the appropriate authority to purchase the interestin the land “in accordance with the provisions of this Act”. Thisbeing so, once the appropriate authority makes the necessaryEapplication to acquire the land within time under Section 49(7),the Court moves over to Sections 126 and 127 of the Act. [Paras12, 13][423-H; 424-A-C]

1.2 Under Section 126(1)(c), when after the publication of adraft regional plan or development or other plan, any land isFrequired or reserved for a public purpose, the appropriateauthority may make an application to the State Government, foracquiring such land under the Land Acquisition Act. Under sub-section (2) thereof, on receipt of such application, if the StateGovernment is satisfied that the land specified in the applicationis needed for the public purpose specified therein, then exceptingGthe cases falling under Section 49, the State Government maymake a declaration under Section 6 of the Land Acquisition Act,to that effect. However, such declaration under Section 126(2)must be made within a period of one year from the date ofpublication of the plan in question. [Para 14][424-D-F]H

1.3 A purchase notice may be served under Section 49, afterthe expiry of one year from the date of publication of the plan inquestion, in which case Section 126(2) of the Act will not apply.Under Section 126(4), the State Government may make adeclaration under Section 6 subject to the modification that themarket value of the land shall be the market value at the date ofthe declaration in the official gazette made for acquiring the land.But this does not mean that the State Government has carteblanche to do as it pleases. Ordinarily, the State Government isbound to act under Section 126(4) within a reasonable time fromthe appropriate authority making an application to acquire theland. This should ordinarily be within a period of one year fromthe date such an application is made. However, if such declarationis not made within the said period, it would be open for theaggrieved person to move the Court to direct the StateGovernment to make the requisite declaration immediately.Thereafter, Section 127 kicks in. If a declaration under Section 6of the Land Acquisition Act is not made within a period of 10years from the date on which a plan comes into force under sub-section (4) of Section 126, the owner or any person interested inthe land may serve a purchase notice on the authorities, and ifwithin one year from the date of service of such notice, the landis not acquired or no steps are commenced for its acquisition,the reservation, allotment or designation shall be deemed to havelapsed. [Paras 15, 16][424-G-H; 425-A-C]

1.4 In all Section 49 cases, where a purchase notice hasbeen served and is confirmed within the period specified, theappropriate authority must make an application to acquire theland within one year from the date of confirmation of the notice.If it does not do so, the reservation, designation, etc. shall bedeemed to have lapsed. If within the period specified in Section49(7), the appropriate authority makes the requisite application,then the State Government may acquire the land by making adeclaration under Section 6 of the Land Acquisition Act as setout u/s.nder Section 126(4), wherein the market value shall bethe market value of the land as on the date of the Section 6declaration. Ordinarily, such declaration must be made within 1year of the date of receipt of the requisite application. In case ABCDE

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Athis not done, it will be open to the aggrieved person to movethe Court to direct the State Government to make the requisitedeclaration immediately. If 10 years have passed from the date ofpublication of the plan in question, and a purchase notice hasbeen served u/s. 127, and no steps have been taken within aperiod of one year from the date of service of such notice, allBproceedings shall be deemed to have lapsed. Thus, even in casescovered by s. 49, the drill of s. 126(4) and s. 127 will have to befollowed, subsequent to the appropriate authority making anapplication to acquire the land within the period specified ins. 49(7). [Para 24][431-B-G]

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1.5 In the instant case, 15 years have passed since thedate of publication of the development plan, and over 10 yearshave passed since the date of the purchase notice issued underSection 49. Considering the fact that there has been no stay atany stage by any Court, it is clear that an inordinately long periodDof time has elapsed, both since the date of publication of thedevelopment plan, as well as the date of the purchase noticeserved under Section 49. No doubt, the letter of 26.9.2008 showsthat an application was made within the requisite time period toacquire the aforesaid land. However, on facts, since after the saidletter nothing has been done to acquire the appellant’s property,Ethe reservation contained in the development plan as well asacquisition proposal have lapsed. It is made clear that this is heldin order to do complete justice between the parties under Article142 of the Constitution of India. However, in all future cases thatmay arise under the provisions of Section 49, the drill of Section F127 must be followed, i.e. that after 10 years have elapsed fromthe date of publication of the relevant plan, a second purchasenotice must be served in accordance with the provisions of Section127, in order that lapsing can take place under the aforesaidSection. [Para 31][433-F-H; 434-A-B]

GGirnar Traders v. State of Maharashtra (2007) 7 SCC555 : [2007] 9 SCR 383; Municipal Corporation ofGreater Bombay v. Dr. Hakimwadi Tenants Association& Ors. (1988) Suppl. SCC 55 : [1988] SCR 21;Shrirampur Municipal Council v. SatyabhamabaiBhimaji Dawkher (2013) 5 SCC 627: [2013] 2 SCR

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664; Prakash R. Gupta v. Lonavala Municipal Counciland others (2009) 1 SCC 514 : [2008] 16 SCR 1067;Hasmukhrai V. Mehta v. State of Maharashtra & Ors.(2015) 3 SCC 154 : [2014] 11 SCR 377 – referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1607of 2018.

From the Judgment and Order dated 05.12.2014 of the High Courtof Judicature of Bombay Bench at Aurangabad in Writ Petition No.4605 of 2014.

Vinayak Dixit, Sr. Adv., Nachiketa Joshi, Santosh Kumar, Advs.for the Appellant.

Ms. Astha Deep, S. M. Jadhav, Nicholas Chaudhary, Bri KishoreSah, M/s. S. M. Jadhav and Company, Satyajit A. Desai, NishantRamakantrao Katneshwarkar, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.

2. The present case concerns a purchase notice issued underSection 49 of the Maharashtra Regional Town Planning Act, 1966(hereinafter referred to as “the Act”) and, in particular, the effect ofSub-section (7) thereof. The aforesaid Section 49 along with otherrelevant provisions of the Act, as they stood at the relevant time, arereproduced hereunder:

Section 49 - Obligation to acquire land on refusal ofpermission or on grant of permission in certain cases. - (1)Where—

(a) any land is designated by a plan as subject to compulsoryacquisition, or A

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(b) any land is allotted by a plan for the purpose of any functionsof a Government or local authority or statutory body, or island designated in such plan as a site proposed to bedeveloped for the purposes of any functions of any suchGovernment, authority or body, or

(c) any land is indicated in any plan as land on which a highwayis proposed to be constructed or included, or (d) any land for the development of which permission is refusedor is granted subject to conditions, and any owner of landreferred to in clause (a), (b), (c) or (d) claims—

(i) that the land has become incapable of reasonablybeneficial use in its existing state, or

(ii) where planning permission is given subject to conditionsthat the land cannot be rendered capable of reasonablybeneficial use by the carrying out of the permitteddevelopment in accordance with the conditions; or

(e) the owner of the land because of its designation or allocationin any plan claims that he is unable to sell it except at a lowerprice than that at which he might reasonably have been exceptedto sell if it were not so designated or allocated, the owner orperson affected may serve on the State Government withinsuch time and in such manner, as is prescribed by regulations,a notice (hereinafter referred to as “the purchase notice “)requiring the Appropriate Authority to purchase the interest inthe land in accordance with the provisions of this Act.

(2) The purchase notice shall be accompanied by a copy of anyapplication made by the applicant to the Planning Authority, andof any order or decision of that Authority and of the StateGovernment, if any, in respect of which the notice is given.

(3) On receipt of a purchase notice, the State Government shallforthwith call from the Planning Authority and the AppropriateAuthority such report or records or both, as may be necessary,which those authorities shall forward to the State Government assoon as possible but not later than thirty days from the date oftheir requisition.

(4) On receiving such records or reports, if the State Governmentis satisfied that the conditions specified in sub-section (1) arefulfilled, and that the order or decision for permission was notduly made on the ground that the applicant did not comply withany of the provisions of this Act or rules or regulations, it mayconfirm the purchase notice, or direct that planning permission begranted without condition or subject to such conditions as willmake the land capable of reasonably beneficial use. In any othercase, it may refuse to confirm the purchase notice, but in thatcase, it shall give the applicant a reasonable opportunity of beingheard.

(5) If within a period of six months from the date on which apurchase notice is served the State Government does not passany final order thereon, the notice shall be deemed to have beenconfirmed at the expiration of that period.

(6) Omitted.

(7) If within one year from the date of confirmation of the notice,the Appropriate Authority fails to make an application to acquirethe land in respect of which the purchase notice has beenconfirmed as required under section 126, the reservation,designation, allotment, indication or restriction on development ofthe land shall be deemed to have lapsed; and thereupon, the landshall be deemed to be released from the reservation, designation,or, as the case may be, allotment, indication or restriction andshall become available to the owner for the purpose of developmentotherwise permissible in the case of adjacent land, under therelevant plan.

Section 50 - Deletion of reservation of designated land forinterim, draft of final Development plan - (1) The AppropriateAuthority (other than the Planning Authority), if it is satisfied thatthe land is not or no longer required for the public purpose forwhich it is designated or reserved or allocated in the interim or thedraft Development plan or plan for the area of Comprehensivedevelopment or the final Development plan, may request—

(a) the Planning Authority to sanction the deletion of such A

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designation or reservation or allocation from the interim orthe draft Development plan or plan for the area ofComprehensive development, or (b) the State Government to sanction the deletion of suchdesignation or reservation or allocation from the finalDevelopment plan.

(2) On receipt of such request from the Appropriate Authority,the Planning Authority, or as the case may be, the State Governmentmay make an order sanctioning the deletion of such designationor reservation or allocation from the relevant plan:

Provided that, the Planning Authority, or as the case may be, theState Government may, before making any order, make suchenquiry as it may consider necessary and satisfy itself that suchreservation or designation or allocation is no longer necessary inthe public interest.

(3) Upon an order under sub-section (2) being made, the landshall be deemed to be released from such designation, reservation,or, as the case may be, allocation and shall become available tothe owner for the purpose of development as otherwise permissiblein the case of adjacent land, under the relevant plan.

Section 126 - Acquisition of land required for publicpurposes specified in plans. - (1) Where after the publicationof a draft Regional Plan, a Development or any other plan orTown Planning Scheme, any land is required or reserved for anyof the public purposes specified in any plan or scheme under thisAct at any time the planning Authority, Development Authority, oras the case may be, any Appropriate Authority may, expect asotherwise provided in section 113A acquire the land,- (a) by agreement by paying an amount agreed to, or (b) in lieu of any such amount, by granting the land-owner orthe lessee, subject, however, to the lessee paying the lessoror depositing with the Planning Authority, DevelopmentAuthority or Appropriate Authority, as the case may be, forpayment to the lessor, an amount equivalent to the value ofthe lessor’s interest to be determined by any of the saidAuthorities concerned on the basis of the principles laid down in the Land Acquisition Act, 1894(I of 1894), FloorSpace Index (FSI) or Transferable Development Rights(TDR) against the area of land surrendered free of costand free from all encumbrances, and also further additionalFloor Space Index or Transferable Development Rightsagainst the development or construction of the amenity onthe surrendered land at his cost, as the Final DevelopmentControl Regulations prepared in this behalf provide, or

(c) by making an application to the State Government foracquiring such land under the Land Acquisition Act, 1894(Iof 1894),and the land (together with the amenity, if any sodeveloped or constructed) so acquired by agreement or bygrant of Floor Space Index or additional Floor Space Indexor Transferable Development Rights under this section orunder the Land Acquisition Act, 1894(I of 1890), as thecase may be, shall vest absolutely free from allencumbrances in the Planning Authority, DevelopmentAuthority, or as the case may be, any Appropriate Authority.

(2) On receipt of such application, if the State Government issatisfied that the land specified in the application is needed for thepublic purpose therein specified, or if the State Government (exceptin cases falling under section 49 and except as provided in section113A) itself is of opinion that any land included in any such plan isneeded for any public purpose, it may make a declaration to thateffect in the Official Gazette, in the manner provided in section 6of the Land Acquisition Act, 1894 (I of 1894), in respect of thesaid land. The declaration so published shall, notwithstandinganything contained in the said Act, be deemed to be a declarationduly made under the said section:

Provided that, subject to the provisions of sub-section (4), no suchdeclaration shall be made after the expiry of one year from thedate of publication of the draft Regional Plan, Development Planor any other Plan, or Scheme, as the case may be.

(3) On publication of a declaration under the said section 6, thecollector shall proceed to take order for the acquisition of the landunder the said Act; and the provisions of that Act shall apply tothe acquisition of the said land with the modification that the marketvalue of the land shall be, - A

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(i) where the land is to be acquired for the purposes of a newtown, the market value prevailing on the date of publicationof the notification constituting or declaring the DevelopmentAuthority for such town;

(ii) where the land is acquired for the purposes of a SpecialPlanning Authority the market value prevailing on the dateof publication of the notification of the area as undevelopedarea; and

(iii) in any other case the market value on the date of publicationof the interim development plan, the draft development planor the plan for the area or areas for comprehensivedevelopment, whichever is earlier, or as the case may be,the date or publication of the draft Town Planning Scheme:

Provided that, nothing in this sub-section shall affect the date forthe purpose of determining the market value of land in respect ofwhich proceedings for acquisition commenced before thecommencement of the Maharashtra Regional and Town Planning(Second Amendment) Act, 1972 (Mah. XI of 1973):

Provided further that, for the purpose of clause (ii) of this sub-section, the market value in respect of land included in anyundeveloped area notified under sub-section (1) of section 40 priorto the commencement of the Maharashtra Regional and TownPlanning (Second Amendment) Act, 1972 (Mah. XI of 1973), shallbe the market value prevailing on the date of such commencement.

(4) Notwithstanding anything contained in the proviso to sub-section(2) and sub-section (3), if a declaration, is not made, within theperiod referred to in sub-section (2) (or having been made, theaforesaid period expired on the commencement of theMaharashtra Regional and Town Planning (Amendment) Act, 1993(Mah. X of 1994), the State Government may make a freshdeclaration for acquiring the land under the Land AcquisitionAct, 1894 (1 of 1894), in the manner provided by sub-sections (2)and (3) of this section, subject to the modification that the marketvalue of the land shall be the market value at the date of declarationin the Official Gazette, made for acquiring the land afresh.

Section 127 - Lapsing of reservations. - If any land reserved,allotted or designated for any purpose specified in any plan underthis Act is not acquired by agreement within ten years from thedate on which a final Regional Plan, or final Development Plancomes into force or if the proceedings for the acquisition of suchland under this Act or under the Land Acquisition Act, 1894 (1 of1894), are not commenced within such period, the owner or anyperson interested in the land may serve notice on the PlanningAuthority, the Development Authority or, as the case may be, theAppropriate Authority to that effect; and if within twelve months[1]from the date of the service of such notice, the land is not acquiredor no steps as aforesaid are commenced for its acquisition, thereservation, allotment or designation shall be deemed to havelapsed, and thereupon, the land shall be deemed to be releasedfrom such reservation, allotment or designation and shall becomeavailable to the owner for the purpose of development as otherwise,permissible in the case of adjacent land under the relevant plan.

3. On 11[th] February, 2002, the Development Plan of Jalgaon Citywas sanctioned by the State Government. The Appellant’s land bearingGut No.37/1 adm. 42-R, situated at Mauje Pimprala, was reserved forprimary school and play ground.

4. On 7th May, 2007, the Appellant issued a purchase notice underSection 49(1)(e) of the Act stating that as their land was reserved forthe aforesaid purposes, the owner was unable to sell it, except at a pricelower than that at which it could reasonably be expected to sell, if it wasnot so designated.

5. On 12[th] December, 2007, the State Government confirmed theaforesaid purchase notice and stated that proceedings for acquisition ofland shall be initiated within one year i.e. before 12[th] December, 2008 asper Section 49(7) of the Act.

6. Within the aforesaid period, the Commissioner, Jalgaon, submitteda proposal for acquisition of the aforesaid land to the Collector, Jalgaonon 26[th] September, 2008. This was followed by a letter dated 28[th] January,2009 issued by the Collector, appointing the SDO, Jalgaon, to completethe acquisition process as laid down by the Act. Since nothing furthertranspired, the owner of the land wrote a letter to the Commissioner, 1 ‘Twelve months’ was substituted in place of ‘six months’ by Act 16 of 2009.

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AJalgaon on 15[th] January, 2014, stating that since no action has takenplace in furtherance of the acquisition proposal, the said proposal haslapsed and that, therefore, the land should be returned to the owner. On28[th] March, 2014, the Assistant Director, Town Planning, JalgaonMunicipal Corporation, wrote back to the owner stating that the landacquisition proposal by the Municipal Corporation “is in process” andBstated that, as Section 49(7) was satisfied on the facts of the presentcase, there was no lapse. A writ petition dated 2[nd] May, 2014 was thenfiled by the owner before the Aurangabad Bench of the Bombay HighCourt, which came to be dismissed by the impugned judgment dated 5[th]December, 2014, stating that Section 127 of the Act alone deals withClapsing of reservation, and that as the purchase notice was issued underSection 49, the said Section would apply only when a person needs todevelop his land immediately. In the present case, the Appellant failed tomake out any such urgent need and since the Municipal Corporation hadalready moved the State Government for acquisition of the Appellant’sland, the writ petition was dismissed.D

7. Learned counsel appearing on behalf of Appellant before ushas taken us through the aforestated provisions of the MaharashtraRegional Town Planning Act, 1966 and has argued that after theappropriate authority makes an application to acquire the land consequentupon the purchase notice issued under Section 49, either the land oughtEto be acquired within a reasonable time therefrom or should be releasedfrom the designation in the Development Plan as per Section 50 of theAct. The impugned judgment was wholly incorrect in stating that therewas no urgent need. Besides, Section 49 applies to the purchase noticeat hand, inasmuch as it is clear that the owner is unable to sell the land, Fthanks to the reservation made. This being the case, over 10 years havinglapsed since the date of the purchase notice, the owner’s land should bedeclared to be free of the designation set out in the Development Plan.

8. On the other hand, learned counsel appearing on behalf of theGovernment specifically argued that the schemes of Sections 49 andG127 are totally different. No lapse can take place under Section 49 ofthe Act, once Section 49(7) stands satisfied and that, since the ownerhas not issued any fresh purchase notice under Section 127 of the Act,no lapsing can be said to have taken place.

9. The scheme of Section 49 of the MRTP Act is to lay downHtimelines within which the appropriate authority must make an application

to acquire the land in respect of which a purchase notice has beenconfirmed. The moment any of the conditions specified in the sub-section (1) are met, the owner or person affected may serve on theState Government, within the time and manner prescribed by regulations,a purchase notice requiring the appropriate authority to purchase theinterest in the land in accordance with the provisions of this Act.

10. On the receipt of the purchase notice as per sub-section (3),the State Government is to forthwithcall from the planning authority orthe appropriate authority such report or records as may be necessary,which the authority shall then forward to the State Government as soonas possible but not later than 30 days from the date of acquisition.

11. In sub-section (4), if the State Government is satisfied that theconditions specified in sub-section (1) are fulfilled, it may either confirmthe purchase notice; refuse to confirm the purchase notice; or directthat planning permission be granted with or without conditions. Undersub-section (5), if the steps contemplated after service of purchase noticeleads to a situation where the State Government does not pass any ordersthereon, the notice shall be deemed to have been confirmed at theexpiration of that period. And finally, under sub-section (7), if withinone year from the date of confirmation of purchase notice, the appropriateauthority fails to make an application to acquire the land in respectof which the purchase notice has been confirmed, the reservation,designation, allotment, indication or restriction on development of theland shall be deemed to have lapsed. Section 49(6), which was deletedby Maharashtra Act 6 of 1976, read as follows:

“Upon confirmation of the notice, the State Government shallproceed to acquire the land or that part of any land regardingwhich the notice has been confirmed, within one year of theconfirmation of the purchase notice, in accordance with theprovisions of Chapter VII.”

It is clear that, under this provision, if within one year from theconfirmation of the purchase notice, the State Government did not acquirethe land, then the consequence would be that the acquisition shall bedeemed to have lapsed. This was a salutary provision, but seems tohave been deleted so that Section 49 cases are brought on par withSection 126 cases.

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A12. The object of Section 49 is thus clear that once a purchasenotice is received by the authorities, there arises, as the marginal note tothe Section also indicates, an obligationto acquire land. The timelinescontemplated by the section also indicate that the owner or personaffected cannot be left to hang indefinitely without a decision to followup the purchase notice by acquisition of the land in question.B

13. However, it has been argued on behalf of the State that Section49 abruptly ends with sub-section (7), after which there are no timelinesindicated as to what is to happen after the appropriate authority makesan application to acquire the land within one year from the date ofconfirmation of the notice. In our view, this argument must be rejected,Cinasmuch as Section 49(1) itself states that the purchase notice mustrequire the appropriate authority to purchase the interest in the land “inaccordance with the provisions of this Act”. This being so, once theappropriate authority makes the necessary application to acquire theland within time under Section 49(7), we move over to Sections 126 and127 of the Act.D

14. Under Section 126(1)(c), when after the publication of a draftregional plan or development or other plan, any land is required or reservedfor a public purpose, the appropriate authority may make an applicationto the State Government, for acquiring such land under the LandAcquisition Act. Under sub-section (2) thereof, on receipt of suchEapplication, if the State Government is satisfied that the land specified inthe application is needed for the public purpose specified therein, thenexcepting the cases falling under Section 49, the State Government maymake a declaration under Section 6 of the Land Acquisition Act, to thateffect. However, such declaration under Section 126(2) must be madeFwithin a period of one year from the date of publication of the plan inquestion.

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15. A purchase notice may be served under Section 49, after theexpiry of one year from the date of publication of the plan in question, inwhich case Section 126(2) of the Act will not apply. Under Section126(4), the State Government may make a declaration under Section 6Gsubject to the modification that the market value of the land shall be themarket value at the date of the declaration in the official gazette madefor acquiring the land. But this does not mean that the State Governmenthas carte blanche to do as it pleases. Ordinarily, the State Governmentis bound to act under Section 126(4) within a reasonable time from theHappropriate authority making an application to acquire the land. This should ordinarily be within a period of one year from the date such anapplication is made. However, if such declaration is not made within theaforesaid period, it will be open for the aggrieved person to move theCourt to direct the State Government to make the requisite declarationimmediately.

16. But the matter does not end here. Thereafter, Section 127kicks in. If a declaration under Section 6 of the Land Acquisition Act isnot made within a period of 10 years from the date on which a plancomes into force under sub-section (4) of Section 126, the owner or anyperson interested in the land may serve a purchase notice on theauthorities, and if within one year from the date of service of such notice,the land is not acquired or no steps are commenced for its acquisition,the reservation, allotment or designation shall be deemed to have lapsed.

17. The aforesaid scheme of Sections 126 and 127 has been thesubject matter of several judgments of this Court. In Girnar Tradersv. State of Maharashtra, (2007) 7 SCC 555, a three-Judge Bench, bya majority judgment delivered by Justice Naolekar, framed the questionbefore the Court thus:

“19. The question that requires consideration and answer in thepresent case is: Whether the reservation has lapsed due to thefailure of the planning authority to take steps within the period ofsix months from the date of service of the notice of purchase asstipulated by Section 127 of the MRTP Act; and also the questionas regards applicability of new Section 11-A of the LA Act to theacquisition of land under the MRTP Act.”

18. After setting out Sections 126 and 127, this Court then laiddown the scheme of Section 126, which makes it clear that the Section6 notification under the Land Acquisition Act is to be issued, in caseswhere acquisition is made under Section 126(1)(c),in pursuance of anapplication by an appropriate authority to the State Government withinone year from the publication of the plan in question, or by way of theState Government making a fresh declaration beyond a period of oneyear under Section 126 (4). This is stated by the Court in paragraph 28as follows:

“28. Sub-section (2) of Section 126 provides for one year’slimitation for publication of the declaration from the date ofpublication of the draft plan or scheme. Sub-section (4), however, A

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empowers the State Government to make a fresh declaration underSection 6 of the LA Act even if the prescribed period of one yearhas expired. This declaration is to be issued by the StateGovernment for acquisition of the land without there being anyapplication moved by the planning/local authority under Clause(c) of Section 126(1).”

19. Insofar as Section 127 is concerned, the Court went on to “31. Section 127 prescribes two time periods. First, a period of 10years within which the acquisition of the land reserved, allotted ordesignated has to be completed by agreement from the date onwhich a regional plan or development plan comes into force, orthe proceedings for acquisition of such land under the MRTP Actor under the LA Act are commenced. Secondly, if the first part ofSection 127 is not complied with or no steps are taken, then thesecond part of Section 127 will come into operation, under whicha period of six months is provided from the date on which thenotice has been served by the owner within which the land has tobe acquired or the steps as aforesaid are to be commenced for itsacquisition. The six-month period shall commence from the datethe owner or any person interested in the land serves a notice onthe planning authority, development authority or appropriateauthority expressing his intent claiming de-reservation of the land.If neither of the things is done, the reservation shall lapse. If thereis no notice by the owner or any person interested, there is noquestion of lapsing reservation, allotment or designation of theland under the development plan. Second part of Section 127stipulates that the reservation of the land under a developmentscheme shall lapse if the land is not acquired or no steps are takenfor acquisition of the land within the period of six months from thedate of service of the purchase notice. The word “aforesaid” inthe collocation of the words “no steps as aforesaid are commencedfor its acquisition” obviously refers to the steps contemplated bySection 126 of the MRTP Act.

32. If no proceedings as provided under Section 127 are takenand as a result thereof the reservation of the land lapses, the landshall be released from reservation, allotment or designation andshall be available to the owner for the purpose of development.

The availability of the land to the owner for the development wouldonly be for the purpose which is permissible in the case of adjacentland under the relevant plan. Thus, even after the release, theowner cannot utilise the land in whatever manner he deems fitand proper, but its utilisation has to be in conformity with the relevantplan for which the adjacent lands are permitted to be utilized.”

20. The Court then went on to consider Municipal Corporationof Greater Bombay v. Dr. Hakimwadi Tenants Association & Ors.,1988 Supp. SCC 55, and was of opinion that, the observations on theexpression “no steps as aforesaid are commenced for its acquisition”stipulated under Section 127 were obiter in nature. The majority thenwent on to state the law under Section 127 as follows:

“54. When we conjointly read Sections 126 and 127 of the MRTPAct, it is apparent that the legislative intent is to expeditiouslyacquire the land reserved under the Town Planning Scheme and,therefore, various periods have been prescribed for acquisition ofthe owner’s property. The intent and purpose of the provisions ofSections 126 and 127 has been well explained in MunicipalCorpn. of Greater Bombay case. If the acquisition is left fortime immemorial in the hands of the authority concerned by simplymaking an application to the State Government for acquiring suchland under the LA Act, 1894, then the authority will simply movesuch an application and if no such notification is issued by theState Government for one year of the publication of the draftregional plan under Section 126(2) read with Section 6 of the LAAct, wait for the notification to be issued by the State Governmentby exercising suo motu power under sub-section (4) of Section126; and till then no declaration could be made under Section 127as regards lapsing of reservation and contemplated declaration ofland being released and available for the landowner for his utilisationas permitted under Section 127. Section 127 permitted inaction onthe part of the acquisition authorities for a period of 10 years forde-reservation of the land. Not only that, it gives a further timefor either to acquire the land or to take steps for acquisition of theland within a period of six months from the date of service ofnotice by the landowner for de-reservation. The steps towardscommencement of the acquisition in such a situation wouldnecessarily be the steps for acquisition and not a step which may A

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not result into acquisition and merely for the purpose of seekingtime so that Section 127 does not come into operation.

55. Providing the period of six months after the service of noticeclearly indicates the intention of the legislature of an urgency wherenothing has been done in regard to the land reserved under theplan for a period of 10 years and the owner is deprived of theutilisation of his land as per the user permissible under the plan.When mandate is given in a section requiring compliance within aparticular period, the strict compliance is required therewith asintroduction of this section is with legislative intent to balance thepower of the State of “eminent domain”. The State possessed thepower to take or control the property of the owner for the benefitof public cause, but when the State so acted, it was obliged tocompensate the injured upon making just compensation.Compensation provided to the owner is the release of the land forkeeping the land under reservation for 10 years without takingany steps for acquisition of the same.

56. The underlying principle envisaged in Section 127 of the MRTPAct is either to utilise the land for the purpose it is reserved in theplan in a given time or let the owner utilise the land for the purposeit is permissible under the town planning scheme. The step takenunder the section within the time stipulated should be towardsacquisition of land. It is a step of acquisition of land and not stepfor acquisition of land. It is trite that failure of authorities to takesteps which result in actual commencement of acquisition of landcannot be permitted to defeat the purpose and object of the schemeof acquisition under the MRTP Act by merely moving an applicationrequesting the Government to acquire the land, which Governmentmay or may not accept. Any step which may or may not culminatein the step for acquisition cannot be said to be a step towardsacquisition.

57. It may also be noted that the legislature while enacting Section127 has deliberately used the word “steps” (in plural and not insingular) which are required to be taken for acquisition of theland. On construction of Section 126 which provides for acquisitionof the land under the MRTP Act, it is apparent that the steps foracquisition of the land would be issuance of the declaration underSection 6 of the LA Act. Clause (c) of Section 126(1) merely provides for a mode by which the State Government can berequested for the acquisition of the land under Section 6 of theLA Act. The making of an application to the State Governmentfor acquisition of the land would not be a step for acquisition ofthe land under reservation. Sub-section (2) of Section 126 leavesit open to the State Government either to permit the acquisition ornot to permit, considering the public purpose for which theacquisition is sought for by the authorities. Thus, the steps towardsacquisition would really commence when the State Governmentpermits the acquisition and as a result thereof publishes thedeclaration under Section 6 of the LA Act.”

21. The scheme of Section 126(2) and (4) was again reiterated inparagraph 61 as follows:

“61. Proviso to sub-section (2) of Section 126 prohibits publicationof the declaration after the expiry of one year from the date ofpublication of draft regional plan, development plan or any otherplan or scheme. Thus, from the date of publication of the draftregional plan, within one year an application has to be movedunder Clause (c) of Section 126(1) which should culminate into adeclaration under Section 6 of the LA Act. As per the proviso tosub-section (2) of Section 126, the maximum period permittedbetween the publication of a draft regional plan and declarationby the Government in the Official Gazette under Section 126(2) isone year. In other words, during one year of the publication of thedraft regional plan, two steps need to be completed, namely, (i)application by the appropriate authority to the State Governmentunder Section 126(1)(c); and (ii) declaration by the StateGovernment on receipt of the application mentioned in Clause (c)of Section 126(1) on satisfaction of the conditions specified underSection 126(2). The only exception to this provision has been givenunder Section 126(4).”

22. In Shrirampur Municipal Council v. SatyabhamabaiBhimaji Dawkher, (2013) 5 SCC 627, this Court reiterated the findingsgiven in Girnar’s case (supra) majority judgment, and held that therewas no conflict between the judgment in Dr. Hakimwadi TenantsAssociation (supra) and the majority judgment in Girnar’s case (supra).This Court thereafter went on to hold:

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“42. We are further of the view that the majority in GirnarTraders (2), (2007) 7 SCC 555 had rightly observed that stepstowards the acquisition would really commence when the StateGovernment takes active steps for the acquisition of the particularpiece of land which leads to publication of the declaration underSection 6 of the 1894 Act. Any other interpretation of the schemeof Sections 126 and 127 of the 1966 Act will make the provisionswholly unworkable and leave the landowner at the mercy of thePlanning Authority and the State Government.

43. The expression “no steps as aforesaid” used in Section 127 ofthe 1966 Act has to be read in the context of the provisions of the1894 Act and mere passing of a resolution by the Planning Authorityor sending of a letter to the Collector or even the State Governmentcannot be treated as commencement of the proceedings for theacquisition of land under the 1966 Act or the 1894 Act. By enactingSections 125 to 127 of the 1966 Act, the State Legislature hasmade a definite departure from the scheme of acquisition enshrinedin the 1894 Act. But a holistic reading of these provisions makesit clear that while engrafting the substance of some of theprovisions of the 1894 Act in the 1966 Act and leaving out otherprovisions, the State Legislature has ensured that the landowners/other interested persons, whose land is utilised for execution ofthe development plan/town planning scheme, etc., are not left highand dry. This is the reason why time-limit of ten years has beenprescribed in Section 31(5) and also under Sections 126 and 127of the 1966 Act for the acquisition of land, with a stipulation that ifthe land is not acquired within six months of the service of noticeunder Section 127 or steps are not commenced for acquisition,reservation of the land will be deemed to have lapsed. ShriNaphade’s interpretation of the scheme of Sections 126 and 127,if accepted, will lead to absurd results and the landowners will bedeprived of their right to use the property for an indefinite periodwithout being paid compensation. That would tantamount todepriving the citizens of their property without the sanction of lawand would result in violation of Article 300-A of the Constitution.”

23. It is, thus, clear that the scheme of Sections 126 and 127would leave nobody in doubt, for the reason that if a period of 10 yearshas elapsed from the date of publication of the plan in question, and no steps for acquiring the land have been taken, then once a purchase noticeis served under Section 127, steps to acquire the land must follow withina period of one year from the date of service of such notice, or else theland acquisition proceedings would lapse.

24. On a conspectus of the above authorities, the following positionin law emerges:

(1) In all Section 49 cases, where a purchase notice has beenserved and is confirmed within the period specified, theappropriate authority must make an application to acquire theland within one year from the date of confirmation of the notice.If it does not do so, the reservation, designation, etc. shall bedeemed to have lapsed.

(2) If within the period specified in Section 49(7), the appropriateauthority makes the requisite application, then the StateGovernment may acquire the land by making a declarationunder Section 6 of the Land Acquisition Act as set out underSection 126(4), wherein the market value shall be the marketvalue of the land as on the date of the Section 6 declaration.Ordinarily, such declaration must be made within 1 year of thedate of receipt of the requisite application. In case this notdone, it will be open to the aggrieved person to move the Courtto direct the State Government to make the requisite declarationimmediately.

(3) If 10 years have passed from the date of publication of theplan in question, and a purchase notice has been served underSection 127,and no steps have been taken within a period ofone year from the date of service of such notice, all proceedingsshall be deemed to have lapsed. Thus, even in cases coveredby Section 49, the drill of Section 126(4) and Section 127 willhave to be followed, subsequent to the appropriate authoritymaking an application to acquire the land within the periodspecified in Section 49(7).

25. The learned counsel appearing for the State has relied uponthis Court’s judgment in Prakash R. Gupta v. Lonavala MunicipalCouncil and others, (2009) 1 SCC 514, wherein this Court held thatthe scheme contemplated by Section 49 is totally different from that ofSection 127, for the reason that there is no period of 10 years in Section A

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A49 as mentioned in Section 127.

26. This judgment does not carry the matter any further as it isclear that, once an application is made within the requisite period containedin Section 49(7), land acquisition must follow in terms of Section 49(1) topurchase the interest in the land, in accordance with the provisions ofBthe MRTP Act, as indicated above.

27. This Court, in Hasmukhrai V. Mehta v. State ofMaharashtra & Ors., (2015) 3 SCC 154, held that where an inordinatelylong delay takes place from the date on which the appropriate authoritymakes an application to acquire the land (in that case 20 years), the landCin question stands released from reservation.

28. In the aforesaid judgment, the purchase notice under Section49 of the Act was dated 17[th] August, 2000. The Director, Town Planning,wrote a letter to the Chief Officer of the Khopoli Municipal Councilstating that proceedings for land acquisition for an Agricultural ProduceDMarket Yard would be initiated within one year from 16[th] March, 2001.Consequently, the Khopoli Municipal Council wrote a letter on 23[rd] April,2001 to the Agricultural Produce Market Committee to initiate acquisitionproceedings. As nothing was done, the Appellant ran from pillar to postand ultimately filed a writ petition in February, 2004, complaining that theRespondents are neither acquiring the land belonging to the AppellantEnor releasing the same from reservation for the Agricultural ProduceMarket Yard. The High Court dismissed the aforesaid writ petitionstating that as the provisions of Section 127 were not attracted, therecould be no lapse. This Court, after referring to Sections 49 and 127 ofthe Act, held:

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“12. We think it pertinent to mention here that APMC, Respondent5, even after service of notice, has not cared to contest this appeal.Also, we think it relevant to mention that till date no steps appearto have been taken for acquisition of the land in question or torelease the same. The land of the appellant, in our opinion, cannotGbe held up, without any authority of law, as neither the same ispurchased till date by the respondent authorities, nor acquired underany law, nor the appellant is being allowed to use the land for thelast more than twenty years.”

29. It thereafter referred to Vijayalakshmi v. Town PlanningMember (2006) 8 SCC 502 and Girnar’s case (supra) and then held:H

“15. In view of the principle of law laid down by this Court, asabove, we are of the view that in the present case since neitherhave steps been taken by the authorities concerned for acquisitionof the land, nor is the land of the appellant purchased underpurchase notice, nor is he allowed to use the land for the lastmore than twenty years, the land will have to be released as theappellant cannot be deprived from utilising his property for anindefinite period.

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18. Accordingly, we allow the appeal and set aside the impugnedorder passed by the High Court. Since no steps appear to havebeen taken till date for the last more than twenty years either foracquisition or for purchase of the land under the MRTP Act, 1966by the authorities concerned, as such, the land in question standsreleased from reservation under Section 127 of the MRTP Act.”

30. The aforesaid judgment lays down that since more than 20years had elapsed since the date of the purchase notice under Section49 on the facts of that case, the land will have to be released fromacquisition. No doubt this Court held that over 20 years is an inordinatelylong period of delay, and therefore, lapsing has taken place under Section127 of the MRTP Act. However, on the facts of that case, no purchasenotice under Section 127 was issued after 10 years had elapsed fromthe date of publication of the requisite plan. This being the case, we readthe judgment as having allowed a lapse to take place, in view of theinordinately long delay of over 20 years, by really doing complete justiceon the facts of that case under Article 142 of the Constitution of India.

31. In the present case, 15 years have passed since the date ofpublication of the development plan, and over 10 years have passedsincethe date of the purchase notice issued under Section 49. Consideringthe fact that there has been no stay at any stage by any Court, it is clearthat an inordinately long period of time has elapsed, both since the dateof publication of the development plan, as well as the date of the purchasenotice served under Section 49. No doubt, the letter of 26.9.2008 showsthat an application was made within the requisite time period to acquirethe aforesaid land. However, on the facts of this case, since after theaforesaid letter nothing has been done to acquire the appellant’s property,we are of the view that the reservation contained in the development A

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Aplan as well as acquisition proposal have lapsed. We make it clear thatwe hold this in order to do complete justice between the parties underArticle 142 of the Constitution of India. However, in all future casesthat may arise under the provisions of Section 49, the drill of Section 127must be followed, i.e. that after 10 years have elapsed from the date ofpublication of the relevant plan, a second purchase notice must be servedBin accordance with the provisions of Section 127, in order that lapsingcan take place under the aforesaid section. With these observations, theappeal is disposed of.

CNidhi Jain

Appeal disposed of.

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